Question

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E9-7 Computing Depreciation under Alternative Methods (LO 9-3] points Sonic Corporation purchased and installed electronic payment equipment at its drive-in restaurants in San Marcos, TX, at a cost of $27,000. The equipment has an estimated residual value of $1,500. The equipment is expected to process 255,000 payments over its three-year useful life. Per year, expected payment transactions are 61,200, year 1; 140,250, year 2; and 53,550, year 3. Required: Complete a depreciation schedule for each of the alternative methods. 1. Straight-line. 2. Units-of-production. 3. Double-declining-balance. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete a depreciation schedule for Double-declining-balance method. (Do not round intermediate calculations.) Balance Sheet Income Statement Depreciation Expense Year Cost Accumulated Depreciation At acquisition 1 $ $ $ 13,500 $ 6,750 Ⓡ$ 3,375 Ⓡ$ 27,000 27,000 27,000 $ $ $ 13,500 20,250 23,625 $ $ $ $ Book Value 27,000 13,500 6,750 3,375 < Required 2 Required 3 >

Answer 1

Depreciation factor of 2 is equivalent to annual depreciation rate of 66.67% for 3 years.	A	B	C = A x B	Cumulative C	A - C
Year	Beginning Book Value	Depreciation Percent =1/3	Depreciation Amount	Accumulated Depreciation Amount	Ending Book Value
1	$27,000.00	66.67%	$18,000.00	$18,000.00	$9,000.00
2	$9,000.00	66.67%	$6,000.00	$24,000.00	$3,000.00
3	$3,000.00	50.00%	$1,500.00	$25,500.00	$1,500.00
	Income statement		Balance Sheet
	Depreciation Expenses	Cost	Accumulated Depreciation	Book Value
Acquisition				$          27,000.00
1	$18,000.00	27000	$18,000.00	$            9,000.00
2	$6,000.00	27000	$24,000.00	$            3,000.00
3	$1,500.00	27000	$25,500.00	$            1,500.00